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Budget cuts: Shumlin concedes

Jim Reardon, Vermont’s commissioner of finance and management, testifies before a meeting of the Joint Fiscal Committee to discuss cuts to the state budget proposed by the Shumlin administration at the Statehouse in Montpelier on Wednesday.(Photo: GLENN RUSSELL/FREE PRESS)Buy Photo

Lawmakers opened their deliberations Wednesday on the Shumlin administration's $31 million budget reduction plan with the declaration that "we were all moved by the testimony we heard yesterday."

During a hearing Tuesday on the budget cuts, a parade of clients and caregivers expressed to the Joint Fiscal Committee their worries about the effects of proposed funding rollbacks in social services programs.

"I move that we not accept the plan in order to make modifications," Senate Appropriations Chairwoman Jane Kitchel, D-Caledonia, proposed just minutes into the meeting. The committee agreed unanimously.

House Appropriations Chairwoman Martha Heath, D-Westford, explained, "We heard several things yesterday we would like to see addressed."

Lawmakers laid out suggestions that totaled $1 million. They wanted to restore half the intended increase to two programs for the disabled, which required finding $700,000. They wanted to provide full funding to Youth in Transition, which required finding $310,000.

After huddling for 30 minutes, the Shumlin administration agreed, even though the $700,000 would come from the governor's business enterprise fund.

"This isn't easy stuff," Shumlin acknowledged later, noting his concession to a second reduction to the special business fund. "Obviously I didn't want to see that go, but it leaves $3.5 million in the fund."

The vote to accept the revised plan solves for now the state's projected revenue shortfall.

Kitchel said the biggest concern that witnesses and lawmakers had with the original budget reduction plan — rescinding a 1.6 percent rate increase to health care providers who provide care to Medicaid patients — had to remain part of the remedy.

"I have found no way to address it," Kitchel said.

The low rate paid for Medicaid services affects wages for many mental health workers in community agencies, witnesses explained Tuesday. Lawmakers heard from numerous agency executives about their struggles to fill vacancies and high turnover.

Rescinding the rate increase saves $3.4 million. It was to begin in January. To pay for the increase for a full year would require $6.8 million.

"I believe the full Legislature needs to come together to deal with this," Kitchel told her colleagues. "The issues that are raised aren't going to go away."

Way and Means Committee Chairwoman Janet Ancel, D-Calais, said the testimony about the wage disparity "was a real eye opener. I wish I could find a solution to it."

Ancel urged the administration to keep the Medicaid rate increase "on the front burner" in the coming months.

Sen, Tim Ashe, D/P-Chittenden, voted against the final deal because it struck the Medicaid rate increase. He worries that this decision, even if reversed later, undermines confidence in government's ability to fund health care at appropriate levels.

That's a bad message as the Shumlin administration and Legislature prepare to advance the state to a government-financed health insurance system covering all Vermonters beginning in 2017, Ashe suggested.

Sen. Diane Snelling, R-Chittenden, also voted against the revised reduction plan. She said her vote represented dissatisfaction with the process which failed to prioritize the work of government so decisions could be made based on those priorities.

The Joint Fiscal Committee tried to make it easier for the governor to accept the plan to take another $700,000 from his $4.5 million enterprise fund. His original reduction plan included removing $250,000 from the pot.

Kitchel said that if this fall the administration needed more than the $3.5 million left in the fund, it could seek approval from the Joint Fiscal Committee to borrow from a source with cash and work about a repayment plan in January. The administration and Joint Fiscal Committee have done that in the past to cover unexpected demands for fuel aid, Kitchel said.

All sides acknowledged that making $31 million in budget changes just weeks after the spending plan took effect had generated anxiety and some hardship.

"It is difficult," said Heath, who is retiring at the end of the term after many years of helping to meet state government's budget challenges. "But it is good we accomplished it in a timely manner."